The effect of corporate governance and managers on the value of companies has
received great attention in the recent public debate. In the academic research, this
increased attention has been associated with an effort to develop finer conceptual
frameworks and analytical techniques to assess how governance and financial
characteristics influence corporate policies and profitability.
While theoretical models represent a successful approach under specific
hypotheses, the econometric analysis of corporate governance and managerial
characteristics has proven to be extremely challenging. Because governance and
managerial characteristics are equilibrium outcomes largely determined by the firm
itself, it is methodologically difficult to separate out their determinants from their
consequences to infer causal effects. Since its infancy the empirical corporate
governance and corporate finance research has faced this problem, which is often
responsible for mixed empirical results.
In my dissertation, I adopt a common methodological framework developed in
the “program evaluation” literature to shed new light on the effects of governance and
managerial characteristics on a variety of corporate policies and, ultimately, firm
performance. In particular, I estimate a class of difference-in-differences models
deriving the empirical identifications from policy changes that generate “quasi-natural
experiments”.